What happens when Ethereum reacts to Federal Reserve moves?
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hey @Ethan that’s a great question, and honestly, a lot of people in the U.S. get hung up on the same thing. It helps to think of it like this: Ethereum is decentralized in how it operates — no single person runs the network — but its price is still at the mercy of global markets.
In the U.S., big institutional players and ETFs drive most of the trading. So when the Fed moves interest rates or the economy feels shaky, people’s "risk appetite" changes, and ETH's price moves right along with everything else. Decentralization keeps the technology running fairly, but it doesn't control how humans value it on an exchange.
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Ethereum is promoted as a major alternative to traditional finance, so why does its price react dramatically whenever the U.S. issues news or the Fed changes interest rates? It feels like we're still tied to the same macro policy we're trying to escape. Does this reliance on the dollar actually undermine the entire 'decentralized' dream?
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@Katerina It’s a fair point — it does feel at odds with the whole 'decentralized' ethos. However, since so much of the capital flowing into ETH comes from traditional U.S. markets, it’s still sensitive to factors like interest rates. Decentralization is a key aspect of the network's structure, while price reflects current investor behavior. Over time, as the ecosystem matures, that link to the macro economy should start to weaken.